Singapore Petroleum announces drop in earnings

Singapore Petroleum Company (SPC), which is controlled by the world's largest rig-builder, Keppel Corp, announces that its first quarter 2006 results dropped by 6.6% from S$72.7 million a year ago to S$69.7 million for 1Q2006. This drop in earnings is despite a growth in revenues from S$1.45 billion to S$2.2 billion. It is expected that the rising oil prices has made a dent in the refining margins enjoyed by SPC as it is mainly an oil refiner. However, SPC states that it expects improving refining margin for the rest of the year citing the lack of global refining capacity as the main reason.

It is also worth noting that the company has some stakes in oil fields being explored in Indonesia and Myanmar. Discoveries in these areas could lead to improvement in earnings as it stands to reap the benefits of higher oil prices. SPC's share price dropped 10 cents in today's trading as it ends the day at S$5.85.